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College Affordability

Starting today, all borrowers with federal Direct student loans have access to a new repayment plan with monthly payments limited to 10% of your discretionary income. You can enroll regardless of when you borrowed. If you’re having trouble affording your monthly payments – or just want the assurance of payments based on your income – check out the Revised Pay As You Earn (REPAYE) plan and see if it’s right for you.

Form and Formula: How the Federal Government Distributes Aid to Students explains the history of need analysis—the method used to determine the amount of federal aid a student receives—and the method of collecting financial data from students and families.

Like many students, my college decision was based largely on the price I would have to pay — tuition, financial aid, and in-state vs. out-of-state costs all had an influence. However, there was one other factor I should have paid close attention to — one that would have solidified for me and my mother whether my investment was a sound decision — and that is graduation rates for Pell Grant recipients.

We spoke with nearly a dozen of these schools to learn more about how they recruit, support (academically and financially), and otherwise ensure low-income students a fair chance at a postsecondary degree.

When colleges shutter their campuses, who’s harmed the most? Students are, especially low-income students. They are the ones with the least protection. That’s why it was so refreshing to see Rep. Bobby Scott (D-Va.) and Sen. Barbara Boxer (D-Calif.) stand up for them by introducing the “Pell Restoration Act of 2015,” which will allow Pell Grant recipients the ability to continue their education at another institution.

SinceHechinger Report released its analysis on the graduation rates of Pell Grant recipients, some people have called the effectiveness of the Pell Grant program into question. Lost in those arguments, though, are three crucial points about the program:

The Hechinger Report just published an article on the graduation rates of Pell Grant recipients at 82 of the largest public and private institutions in the nation. Considering nearly 9 million low-income students receive Pell Grants annually, it’s a topic that we care deeply about. In fact, we’ve spent the last year collecting and analyzing the graduation rates of these very students. And, in a few weeks, we’ll share what we found.

Recently we shared two of the films in a series produced by the Lumina Foundation and the Institute for Higher Education Policy. The series — Looking Back to Move Forward: A History of Federal Student Aid — provides insight into the evolution of financial aid through first-hand experiences with the policymaking process.

Over 40 million Americans are working to repay more than $1.2 trillion in outstanding student loan debt.

Some borrowers have already shared with us their experiences with their student loan servicer (the company that sends a bill each month). We’ve released the first batch of your stories and we encourage you to take a look at what we’re hearing from the public at regulations.gov.

Corinthian Colleges has become the poster child for what’s wrong with the for-profit college industry. It misrepresented its job placement — the eligibility criteria for it to receive federal funds — and abruptly closed its doors when the federal government demanded some accountability.

The immediate victims of this business’ collapse are the thousands of students left with debt, worthless degrees, or both. The secondary victims are taxpayers.

If you’ve been following #highered on social media lately, you may have noticed that college affordability and student loan debt are attracting attention of the 2016 presidential contenders. Many candidates harp on colleges to lower costs and on states to increase their funding, but any solution to making college more affordable needs to do more...

Earlier today, the U.S. Department of Education announced new steps to protect students from abusive for-profit colleges, as well as a new debt relief process for students at Corinthian Colleges – which operated schools under the names Everest, Heald, and Wyotech.

When I was a high school senior (many moons ago), I thought I was well-equipped to make the best college choice for me. I had read the brochures (Google wasn’t a thing back then); talked with my school counselor as well as friends and family; and visited campuses to check things out in person. After doing all of that and receiving acceptance letters and financial aid packages, I made a decision...

College Results Online has been updated with the most recent data from the federal government (2012-13), giving you even more information to compare in this one-stop shop tool. At CollegeResults.org — now in its 10th year of compiling and sharing critical information on colleges across the country — you can select nearly any four-year college or university and compare its graduation rate with that of similar institutions serving similar students.

The last time we checked in, we shared Part 3 of the Lumina Foundation and Institute for Higher Education Policy’s Looking Back to Move Forward: A History of Federal Student Aid. It’s a great documentary series on the evolution of federal student aid.

When you’re told that your college will be shutting down, there can be a lot of uncertainty about what comes next. In light of recent closures of certain for-profit colleges, we wanted to share some helpful advice to help you navigate the situation.

Imagine this: You’re 24, have your high school diploma, and have been working in a low-wage job for six years when you see an advertisement for a new career training program at a local, for-profit university. The ad promises to teach the latest, cutting-edge skills that will guarantee you a high-paying career...

Ten years ago, we created College Results Online to challenge the conventional wisdom that colleges’ graduation rates were simply a function of the students they served. Since then, this online tool has shown us that colleges serving similar students often get very different results.

It is a well-known fact that many for-profit colleges fail to live up to their end of the deal with students. These for-profits lure students into enrolling with the promise of landing a high-paying job after they graduate. But come graduation — or for the many who leave without finishing — all a lot of students are left with is a mountain of debt. Oftentimes for-profits’ primary interest is to bring in the federal financial aid dollars students receive — like those from Pell Grants, federal student loan dollars, and veterans benefits — while educating students becomes secondary or worse. This is particularly worrisome for African American and Latino students who make up 21 percent of total postsecondary enrollment, yet they represent 41 percent of students at for-profit institutions.

If you watch daytime or late-night TV, you’ve seen the slick, 30-second commercials that promise down-on-their-luck viewers a fairy godmother-like solution – a quick, affordable, college-level education that provides hands-on experience and positions students to land their dream job. If you want proof of the quality of these career education programs, the commercials continue, look no further than the myriad of success stories of their graduates.

Each year millions of Americans depend on Pell Grants to help make college affordable. Research has shown that need-based grant aid, like Pell Grants, increases college enrollment among low- and moderate-income students. But with college costs skyrocketing over the last three decades, Pell Grants have lost much of their purchasing power. In the 1980s, Pell Grants covered77 percent of the cost of college at a four-year public college for low-income students. Today that share has dropped significantly to only 31 percent of the cost.

What’s more disturbing — that nine public college executives earned more than $1 million last year or that there appears to be little connection between president pay and college performance in serving students?

Of those nine executives, two lead institutions where the six-year graduation rate is far below the national average of 59 percent.

At the University of Houston, where President Renu Khator made $1.2 million last year, only 46.2 percent of students graduate in six years. While the University of Houston’s graduation rate ticked up by only one-tenth of 1 percentage point between 2011 and 2012, Khator’s total compensation increased by 75.3 percent.

According to Congressional Budget Office estimates for the 2015-16 school year, the average undergraduate borrower will pay 5.72 percent to borrow from the federal government; for graduate borrowers the rate is forecasted at 7.27 percent, and for Parent Plus loans, 8.27 percent. All rates are higher than what students paid to take out loans this year.

What may be even more troubling than the rising interest rates is that the CBO has projected that the federal government will generate $127 billion in profits from loan payments over the next decade.

35 years ago the maximum Pell Grant paid for 77 percent of the cost of tuition at an in-state, four-year college, today, that same Pell Grant pays for less than one-third of a student’s education. Furthermore, students who want to attend school year round to finish their degree in less time are not allowed to receive year-round Pell funding.

With nearly nine million American students depending on Pell Grants to attend and complete college, this program must remain a priority in Washington.

On Tuesday, Young Invincibles and StudentDebtCrisis.org hosted a Google Hangout on the “Top 5 Tips for Tackling Your Student Debt.” Rohit Chopra, of the Consumer Financial Protection Bureau, offered some of his best tips for managing student loan debt. In case you missed the great conversation, here’s a brief recap of some of the advice offered:

New state report cards reveal that some states are failing their students (or barely passing) when it comes to their commitment to higher education. As states are the No. 1 driver of rising college tuition, it’s about time we get to see just how well they are performing.

Today, Young Invincibles, a national organization committed to expanding economic opportunities for young adults, released report cards grading all 50 states on their investment in higher education. The report cards give each state an A-F letter grade based on five categories: tuition, spending per student, burden on families, state aid to students, and prioritizing education in the budget.

President Obama released his proposed $3.9 trillion budget for fiscal year 2015 on Tuesday. Although the budget plan serves chiefly to highlight the president’s priorities, the attention his plan gives to measures that will help improve college affordability should not be overlooked.

For starters, the maximum Pell Grant would increase by $100, allowing students who demonstrate financial need to obtain up to $5,830. Additionally, the Washington Post reports:

“Obama is seeking $7 billion over 10 years to reward colleges that enroll Pell Grant recipients and help them graduate on time. And the president wants $4 billion over 10 years for a fund to encourage states to fund colleges and universities based on outcomes such as on-time graduation rates.”

Earlier this month, the U.S. House of Representatives overwhelmingly passed legislation that would induce public universities around the country to give veterans in-state tuition rates. With an astounding 390 House members on both sides of the aisle voting in favor of the bill (if only all agreements in Congress were that easy), the GI Tuition Fairness Act (H.R. 357) will help to ensure that our service members are able to pursue a fairly priced college education when they return home.

Every year, 65,000 undocumented students who have lived in the United States for at least five years graduate from high school. Only 5-10 percent of them, though, go on to college; the majority of these students either give up on their dreams or put them on hold because they are denied the opportunities for an affordable higher education.

This week, a bipartisan organization launched TheDream.US, a $25 billion scholarship fund that will provide full tuition for 1,000 undocumented students nationwide. Currently, because of their status, they are ineligible for federal financial aid (meaning no Pell Grants or low-interest loans), so this will help draw the bridge to college for many.

Press release from the student led campaign that protested against the cuts to the University of Virginia's financial aid program. Originally posted on RestoreAccessUVa.com.

CHARLOTTESVILLE (February 6, 2014) — On behalf of the Restore AccessUVA Campaign, we would like to express our immense gratitude to the University of Virginia (U.Va.) board member and alumnus John Griffin for his generous $4 million dollar challenge donation toward AccessUVa. The donation kicks off an $8 million challenge grant effort to benefit incoming undergraduate students who show “exceptional promise and significant financial need.” We would also like to commend and thank President Sullivan and other U.Va. administrators for renewing the University’s commitment to making need-based financial aid for low-income students a top institutional priority.

With the recent good news that the University of Virginia (U.Va) has once again prioritized financial aid for its lowest-income students, a promising bill in Virginia has emerged that will make a larger, statewide commitment to college affordability.

Introduced by Virginia Delegate Rob Krupicka, Virginia College for All (formerly, the Virginia Guaranteed Assistance Program) would offer no-loan guarantees to low-income students and interest free loans to students of middle-income families who graduate within 150 percent of the time to standard completion (6 years for a traditional four year college and 3 years for a two year college).

At last, good advice to help pay for college and reduce those ever accumulating costs!

Christina Couch, a freelance writer and author of "Virginia Colleges 101", gives some useful tips for current college students, prospective students, and recent graduates. Couch offers information that includes everything from keeping an eye on federal policy, to keeping grades up while in school, and taking advantage of income-based loan repayment plans.

Read the full list of 10 tips at bankrate.com, but click on the heading for the list, sans explanation.

A report shows that student loan debt has increased 10.5 percent in just one year. According to The Project on Student Debt at The Institute for College Access and Success (TICAS), from 2011 to 2012, average student loan debt rose from $26,600 to 29,400.

The Consumer Financial Protection Bureau (CFPB) issued a new rule that puts the seven largest non-bank student loan servicers under its supervisory jurisdiction. Student loan servicers are third-party companies such as Sallie Mae, Great Lakes Educational Loan Services, Nelnet Servicing and the Pennsylvania Higher Education Assistance Agency that manage borrowers account and process their monthly payments. Under this new rule, they will join banks that service student loans in being regulated by the CFPB.

Student loan debt is rapidly approaching $1.2 trillion. What’s worse is that, with little reliable data available about the impact of student loan debt, we can't assess the real effect it's having on the economy. Regardless, we do know that student debt isn't good for sustaining a growing nation.

Freshly-minted, young graduates should be leaving college ready for the workforce and to help feed our thriving economy. Instead, burdened with high amounts of student debt, they usually don't have the extra cash to thrust back into the economy.

George Mason University recently hosted the U.S. Department of Education’s second of four college affordability forums to discuss the Obama administration’s proposed college ratings system. At the event, students expressed the same concerns to the department that thousands of current and prospective college students, like me, have across the nation: Students want more data to assess our financial future before enrolling in college and taking on massive amounts of student loan debt. To start, these data need to include information about the net price of college, the average incomes of graduates in different fields, and data on internship placement rates.

First lady Michelle Obama announced on Tuesday that she will take on a policy driven initiative to promote all students to continue their education beyond high school. The New York Times writes:

“In her new project, Mrs. Obama will work with the Education Department to help further President Obama’s initiative to vault the United States from 12th to first in the world in the percentage of college graduates by 2020.”

All students deserve affordable access to higher education and we applaud Mrs. Obama for coming to the front lines of this critical issue. Currently, our college-educated generation is crippled with student debt, which has a crippling effect our economy. Mrs. Obama said in her speech:

While we celebrate service members’ valor today on Veterans’ Day, we must also ensure that the men and women who protect our nation are able to pursue a valuable degree and worthwhile education at home. Yet, many for-profit colleges have preyed on military personnel— to acquire access to their federal educational benefits — and are luring them into enrolling at colleges that may not offer them the best education.

Fortunately, some members of Congress are pushing legislation to curtail further abuses.

As college tuition and fees continue to rise, more students are finding that they have to turn to private loans - which are usually tagged with higher interest rates and less consumer protections than federal loans - in order to finance their degree. As of July 2012, about 850,000 private loans were in default.

This new report from the Consumer Financial Protection Bureau (CFPB), summarizes roughly 3,800 complaints on private student loans received from October 1st, 2012 to September 30th, 2013. The most common complaints reported by students were having difficulties making advanced payments on their loans

Participant Media has helped produce “99 Percent: The Occupy Wall Street Collaboration Film”, which details the gripping accounts of the Occupy Wall Street movement. Student debt-- something 1.2 trillion of the 99% are facing-- is a main focus of the documentary. It’s a must-see film telling the story of how disenfranchised youth, many of whom have debts they can’t pay, created a powerful voice for the 99 percent.

In the event that there’s an extended government shutdown, The Washington Post reports that most of the U.S. Education Department’s employees won’t be reporting to work. While this doesn’t have a major impact on federal student aid – as it has already been dispersed for this semester – many of you in college may still feel the effects.

As many of you may know, early in August, the University of Virginia’s (UVa) Board of Visitor (BOV) – the governing board for the institution - voted to slash overall funding for AccessUVa, the school’s financial aid program, and completely eradicate the no-loan policy for low-income students in the program. Vice Rector of the Board, William Goodwin, justified the cuts by proclaiming that low income students shouldn’t get an advantage wealthier students don’t have, “they all graduate with the same degree”, as reported in this Daily Progress article.